World Economy

S. Korea GDP Rebounds

S. Korea GDP ReboundsS. Korea GDP Rebounds

South Korea’s economic growth has improved during the second quarter thanks to stronger private consumption and increased housing construction.

Bank of Korea said the economy expanded 3.2% during the April-June period, the fastest clip in seven quarters, AP reported.

The year-on-year growth also outpaced economists’ expectations of a 3% rise, and 2.8% growth in the first quarter. It was the fastest pace since the third quarter of 2014.

From the previous three months, it eked out a 0.7% growth. That was up from the 0.5% recorded in the first three months of 2016, and surpassed economists’ expectations of 0.6%.

On a quarterly basis, South Korea’s economy grew less than 1% for a third straight quarter.

The bank said sales of clothes and durable goods drove up private consumption. Construction spending was robust thanks to an increase in new houses.

In June the Bank of Korea cut its benchmark lending rate, while the government unveiled plans for a won 20 trillion ($17.5 billion) stimulus package at the end of the month.

The BoK also recently revised its 2016 expectations for economic growth lower, on the back of increased uncertainty from factors beyond South Korea, such as the UK’s recent vote to leave the EU. The bank now expects the economy to grow 2.7% this year, down from an original estimate of 2.8%.

The South Korean economy grew faster than expected, some pleasing news for policymakers who are battling sluggish domestic consumption and falling exports with a range of stimulus measures.